Benefit function and individual preferences. A generalization of the zero-maximum principle

Juan Aparicio, Jesus T. Pastor


In this paper we show that given a utility threshold Luenberger’s benefit function correctly represents individual preferences as long as specific reference commodity bundles are considered. We further show a condition which is sufficient for reaching Pareto optimality that generalizes the zero-maximum principle proposed by Luenberger. Under our hypothesis, the social benefit could be positive, negative or zero, and not necessarily always zero.

Full Text:



Allais, M. (1943) A la Recherche d’une Discipline Economique, 3rd. Ed, (published as Traite d’Economie pure, Clement Juglar, 1994), Paris.

Chambers, R.G. and Färe, R. (1998) Translation homotheticity, Economic Theory, 11, pp. 629-641.

Courtault, J.M., Crettez, B. and Hayek, N. (2007) A Note on Luenberger’s Zero-Maximum Principle for Core Allocations, International Game Theory Review, 9(3), 453-460.

Dierker, E. and Lenninghaus, J. (1986) Surplus maximization and pareto-optimality. In Hildenbrand, W. and Mas-Colell, A. (eds.): Contributions to Mathematical Economics, North Holland: Amsterdam, 143-166.

Edgeworth, F.Y. (1932) Mathematical Psychics, Reprint London School of Economics: London.

Luenberger, D.G. (1992a) Benefit functions and duality, Journal of Mathematical Economics, 21, 461-481.

Luenberger, D.G. (1992b) New optimality principles for economic efficiency and equilibrium, Journal of Optimization Theory and Applications, 75(2), 221-264.

Luenberger, D.G. (1995) Microeconomic Theory, McGraw Hill: Boston.



  • There are currently no refbacks.

ISSN: 2254-4380